MACROECONOMICS - Finance Minister Sri Mulyani has said the government will keep the country’s debt-to-GDP ratio below 30 percent, far lower than the legal threshold set at 60 percent.
“We will maintain the debt level below 30 percent, far lower than the 60 percent stipulated in the law,” Sri Mulyani said in Jakarta on Monday during a hearing with members of House of Representatives Commission XI, which oversees financial affairs.
The minister was referring to the State Finance Law issued in 2003.
Sri Mulyani explained that at 28 percent last year, Indonesia’s debt-to-GDP ratio remained low compared to the country’s G20 peers, except Russia, where the ratio was even lower at 17 percent.
According to International Monetary Fund (IMF) data, the debt-to-GDP ratio of neighboring countries Thailand and the Philippines stood at 42 and 38 percent, respectively, last year, while in the emerging countries of Brazil and India it was recorded at 78 and 70 percent respectively.
This year, government debt is expected to reach Rp 3.89 quadrillion (US$291.69 billion), lower than the Rp 3.93 quadrillion assumed in the revised 2017 State budget.
As of July, the government’s debt stood at Rp 3.77 quadrillion in total, with Rp 3.04 quadrillion in the forms of government debt papers (SBN) and Rp 735 trillion in the form of domestic and foreign loans. (mrc/bbn)
